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CenturyLink: We can achieve 50% penetration in areas served by CAF-II

CenturyLink said that as it extends broadband services to rural areas via the FCC’s CAF-II program, it can attract a larger amount of customers that reside in 1.2 million homes with 10/1 Mbps speeds.

In 2015, CenturyLink accepted $500 million in the second phase of the FCC's Connect America Fund (CAF-II), enabling it to deliver broadband services to about 1.2 million rural households and businesses in 33 states over the next six years.

By accepting the 33 CAF II statewide offers, CenturyLink will be able to deliver up to 10/1 Mbps to locations in FCC-designated, high-cost census blocks that today can get at best between 1.5 to 3 Mbps speeds.

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Stewart Ewing, CFO of CenturyLink, told investors during the Goldman Sachs 25th Annual Communacopia Conference that as its technicians begin building service in a community, more users will sign up.

“There are numerous examples of places where we have gone out and enabled locations that did not have service before,” Ewing said. “With door hangers left by the technicians and word of mouth, basically you can quickly get penetration of 50 percent.”

Since CenturyLink is going to be building out fiber to backhaul traffic from remote DSLAMs and in COs, the company could provide a side benefit to other customers that reside along the path to the more rural areas.

“There will be ancillary benefits to the build as well,” Ewing said. “As we get out to those areas, we’ll be installing fiber, which allows us to increase speeds along the way to potential customers.”

Today, the majority of these homes can only get 1-3 Mbps speeds since these locations have been too difficult to build a proper business case to build out service.

“These homes are unserved or very underserved,” Ewing said. “They are currently getting under 3 Mbps services today.”

Extending wireline broadband to rural areas has been a continual focus for CenturyLink.

Like fellow telcos Frontier and Windstream, CenturyLink also participated in CAF-I, accepting $75 million in support to bring 4/1 Mbps broadband to 114,000 unserved rural locations.